Semiconductor stocks have undergone strong volatility in recent days: which is not very related to business reasons but to the sensitivity typical of these tech stocks to Fed rates and decisions. The American Central Bank confirms itself as a hawk at the moment and is strongly intent on fighting inflation. While this year’s rate hike should be discounted in prices, the decision to cut the balance sheet has not yet been made and could still generate volatility on the stock.
AMD [AMD.O] is down 1.2% to $99.76 in pre-trading. On Friday, it closed at $101. Graphically, the situation is very clear. The stock returned to the key support: a very important watershed at $100. In fact, since July 2021, AMD has always remained above this level. Now the eventual break in volatility would give an important short signal, while the restart would give a useful signal to a long one. The strategy is therefore twofold and is activated at the following levels according to the behavior of the stock in the coming days. We will activate the short on the volatility break and with volumes of $100 (the figure in this case recalls the head and shoulders lowered with the neck line at $100) and a target of $90, while we will activate the long on exceeding $106 with a target at $115 and $130.
We recommend going LONG on the stock by buying the Leverage Shares 3X AMD ETP (ISIN: XS2337090422) or the 2X ETP (ISIN: IE00BKT6ZG93) on a break of $106, with a target of $115 and $130. For the short, instead, buy Leverage Shares AMD -1X ETP (ISIN: IE00BKT66Q62), on a break of $100 in strength and a target of $90.
